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EXIM
POLICY - Ministry Of Finance(1997 - 2002)
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The
said policy was declared by the Government of India on 31st
March 2000. The followings are the salient points of the policy
declared. |
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EPCG
Scheme |
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The Export Promotion of Capital Goods
(EPCG) Scheme has been extended to all sectors and capital goods.
It has removed the threshold limit of Rs.20 crores and withdrawn
the 10 per cent countervailing duty (CVD) on such imports and
also withdrawn the facility of 2000 import. The import of capital
goods will be allowed without any threshold limit on payment
of 5% duty. It has fixed a single period of 8 years for fulfilling
export obligations 20% of the cost insurance freight (CIF) will
be allowed. But this will be subject to export obligation equivalent
to 5 times the CIF value of capital goods on free on board (FOB)
basis or 4 times the CIF value of capital goods on net foreign
earning basis, to be fulfilled over 8 years from the issuance
of licence. |
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Replenishment
Licence Back |
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The policy has reintroduced the replenishment licence scheme,
under which a duty free replenishment certificate (DFRC) will
be issued to a merchant exporters or manufacturer-exporter for
importing of inputs used in the manufacture of goods without
payment of basic custom duty, surcharge and special additional
duty. Such imports will be subject to payment of additional
custom duty equal to the prevailing excise duty. The scheme
will be announced by Director General of Foreign Trade. Under
this scheme the input materials worth about 10% of total export
value may be allowed to import as per standard input-output
norms. These Licence will have validity period of one year.
The policy stipulates that the items imported under the replenishment
licence should be subjected to a minimum value addition of 33%. |
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Modvat |
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The export product which is eligible for modvat will also be
eligible for cenvat. However non-excisable non dutiable or non-centrally
watable (non-modvat) will be eligible for drawback at the time
of export in lieu of additional custom duty to be paid at the
time of imports under the DFRC Scheme and also will be entitled
for draw back benefits in respect of any of the duty paid materials,
not covered under input-output norms, whether imported for indigenous
use in the export product or not. |
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SIL
Discontinued |
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The Special Import Licence (SIL) list would be abolished after
April 2001, and the grant of SIL would be discontinued after
March 31, 2000. The second hand capital goods that are less
than 10 years old could be imported without obtaining any licence
on surrender of SIL. The Policy also stipulates that the export
goods manufactured by the use of capital goods imported requires
further preserving and add value to the goods manufactured by
these capital goods, the export obligation will be enhanced
by 50%. Under the new exim policy, all items under SIL can now
be imported on surrender of SIL equivalent to five times the
cost, insurance and freight (CIF) value of imported goods.
Textile - the new policy has allowed 16 items to be imported
under SIL with effect from March 31, 2000. The list of items
included following items of silk :
- Raw
silk (not thrown)
- Silk
yarn (other than yarn spun from silk waste) not put up for
retail sale
- Yarn
spun from silk waste, not put up for retail sale
- Silk
yarn and yarn spun from silk waste put up for retail sale;
silk worm gut.
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Special
Advance Licence Abolished |
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The scheme of special advance licence and transferable advance
licence are abolished Now advance licence scheme for physical
exports, advance licence for domestic supply and advance licence
for intermediate supply for exports will be subjected to actual
user conditions and non transferable. In exceptional cases,
however, the material imported may be allowed to be transferred
on merits by the Advance Licensing Certificate (ALC).
There will be two main scheme now
- The
Post Shipment DEPB scheme.
- The
quantity based advance licensing scheme and the REP licences.
The transferable quantity - based advance licences will
be replaced with REP Licences.
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REP
Licence |
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In REP licences scheme the exporter first exports the goods
and then as per the input output norms will be entitled to import
inputs at zero duty rates. In the REP Licences System, there
will be less accounting with no need to keep track of how much
export obligation has been met. |
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Project
Imports |
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Sops to encourage project exports from India. The project exporter
with turnover of Rs.100 crores can now apply for an international
service house status. The MOU between exporter and DGFT should
take place with an undertaking to achieve an export performance
to the tune of Rs. 15 crores a year for the next three years. |
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DEPB
Scheme To Be Phased Out By 2002 |
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The policy has decided to phase-out the Duty Entitlement Pass
Book Scheme by 2002. While the pre-export DEPB Scheme has been
abolished with immediate effect, the post export DEPB Scheme
will continue till March 31, 2002. The threshold limit of Rs.20
crores for fixing new DEPB rates has been abolished.
Assigning of value caps for those product where the DEPB rate
is over 15%, value caps will however, not apply to those products
that are exported under Brand names. But, only those branded
products which are approved by inter-ministerial committee in
the DGFT will be eligible for the benefit.
The number of items in the value cap category has been put at
591 with majority item belonging to engineering (225) and chemicals
(150) sector. The value caps are being fixed and will be prescribed.
There will be no system of verifying the present market value
in categories where value caps exist.
Meanwhile, DEPB rates for some items have been rationalised
to account for changes in customs duty, while DEPB rate has
increased for 1789 items (2%) covered by scheme; the rate has
been reduced for 238 items (13%). For majority 1522 (85%) items,
the rates remains unchanged.
The Government is examining ways to streamline the system of
refund of taxes and duties on inputs at the time of shipment
itself once DEPB scheme is sub-sumed into Drawback Scheme by
2002. It will be strengthening the drawback system to extend
the facility to as many items as possible and also to introduce
a system of awarding brand drawback rates.
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Special
For EOU |
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The policy has allowed conversion of the export processing zones
into special economic zones and special concessions for cent
percent export oriented units and export processing zones. EPZ
include Mumbai, Kandla, Vishakapatnam and Cochin. SEZ unit will
be proposed to be set up in Nangunerry in Tuticorin and Positra
in Gujarat.
Besides units having an investment of Rs.5 crores and above
in plant and machinery will be allowed to carry out job works
for domestic tariff area units in all sectors. This scheme was
so far available only for agriculture, marine and garment sectors.
These EOU/EPZ will be required to maintain only positive value
addition.
The government intends to declare units exporting more than
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